After a brief bullish run and recovery on Thursday, Bitcoin and Ethereum prices continue to struggle with support. This week’s 0.75% Fed interest rate hikes created significant bearish momentum for global and crypto markets. It’s not surprising that crypto markets show little improvement this Friday as stocks opened in the red, with the Dow Jones down 1.45%, S&P 500 down 1.68%, and the NASDAQ declining by 1.13% in the first few hours since opening. Let’s look at relevant Bitcoin, Ethereum, and global market news affecting prices this Friday.
Bitcoin continues to struggle with maintaining the $20k support, which has been a critical level for the cryptocurrency over the past several months. The bearish momentum and the global economy continue to create significant uncertainty in the markets as investors are wary of investing and opening long-term positions in risky assets like crypto.
Major Bitcoin mining operations are one of the hardest-hit businesses with crypto’s bear market, with the latest company, Compute North, filing for Bankruptcy as they owe up to $500 million.
According to a Yahoo Finance report:
“Compute North, one of the largest operators of crypto-mining data centers, filed for bankruptcy and revealed that its CEO stepped down as the rout in cryptocurrency prices weighs on the industry.”
After raising nearly $385 million in February, the company has been unable to recoup profitability with the mining difficulty and with prices down more than 50% in the past several months.
In other, more positive news, Michael Saylor continues to make highly bullish predictions for BTC, claiming that Bitcoin could hit $68k in four years and over $500k in the next decade.
It’s clear that, for some reason, Bitcoin has a high correlation with the global markets and continues to be affected by the stock market’s price action. If the global economy returns to healthy levels, we will likely see significant bullish momentum for cryptocurrencies like Bitcoin and Ethereum.
Speaking of Ethereum, it seems that while the Merge was successful and will enable the network to support a much larger user base over the next several months, the fact that many miners left the network and are selling off their ETH creates significant bearish sentiment for the asset.
While some predicted that Ethereum would exhibit bullish momentum post-merge, in fact, Ethereum only suffered substantial losses. While Ethereum was trading at $1,700 around the time of the Merge, it now struggles to hold support at $1,300.
It may take several months for Ethereum miners to capitulate their losses and move on to another POW coin like Ethereum Classic. Until then, expect to see Ethereum trade in the low $1,000s. Moreover, until Bitcoin’s price and the stock market show significant improvement, it’s unlikely for ETHUSD to rally past $2k.
Patience is the name of the game when it comes to cryptocurrency markets, as it’s a common trend to have to deal with a long, drawn-out bear market, followed by a short burst of bullish momentum where long-term holders are rewarded with 5x-10x gains in a matter of months.
Overall the crypto community continues to build and innovate, and the bearish market sentiment is bound to change sooner or later. While 2022 might be “cursed,” and we’re unlikely to see any significant upside this year, next year is a fresh start, and we could finally start seeing a recovery if the global state of events improves when it comes to political conflict, the Covid-19 pandemic, and the state of the economy.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any projects.
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